Harley Davidson Case Study Example
The differentiation strategy implies that the product must differentiated by a specific method which otherwise have similar features as that of the competitor products. Harley Davidson has employed the same differentiation strategy in their product mix and has glorified its products by means of distinctive designs and interactive models. Harley Davidson is an established brand in the United States with the history of hundred years of operations. The impressive performance and iconic operations of the company have made its products a synonym with quality. The company at present is working with more than 30 models each having its distinctive design and architecture.
The company has observed tremendous success in U.S market with customers ready to pay higher prices for its products for 20 consecutive years. But the strategy somehow, remained ambiguous in European market where it failed to attract the same proportion of customers that of the U.S market. In order to attract customers in the European market, the company is planning to introduce a new kind of engine the V-Rod with Porsche engine architecture (Lawrence & Lorsch, 2011). The success of V-Rod model is highly anticipated as the model proved quite desirable in the Japanese market in the mid-2008, but the sales later declined due to governmental restriction on passenger on motorbikes. The second most preferred choice for the country could possibly be India and China where there is high demand for quality products and a large consumer base (Bolin, 2009).
The degree of rivalry
The degree of rivalry is the most intense expression of the relative activeness of the company to produce products that enable a tough competition to its rivals. The value creation can be observed with the relative head to head competition between firms. The force has effectively been utilized by Harley Davidson as its corporate strategy.
The threat of entry
The threat of potential competitors always exists and can impact the average industry profitability (Porter, 2007). Harley Davidson, in order to effectively deal with this threat, has applied various strategies such as high potential cost of operations, effective marketing, and loyal customer base and established good will. This enables the firm a competitive edge over other new entrants.
The threat of substitute:
This is another factor which can affect profitability. While the threat of substitute could always exist due to reduced buying power or increased product quality from rivals, what Harley Davidson has opted as a strategy is the differentiation of its products. This differentiation attracts customers and distinguishes its products from other competitors.
The notion of buyer’s power is less concerned by Harley Davidson. This is because H.D specifically focuses on high net worth individual as they are the one who purchase company’s products without caring for the price tag.
The supplier power arises where there are few suppliers to the firm (Porter, 2011). H.D is a firm working for some hundred years. This has created a strong relationship with the suppliers and its production flow rarely stops.
Harley Davidson distinguishes its products by a number of manners. At first, it is the brand image that provides it an edge over its competitors. Its rock style, iconic designs are the main preference why customer chooses Harley Davidson over other bikes. Quality, price, and durability are other factors that count as well. It is an established national company of the United States while other bike producers such as BMW and Yamaha are located outside of the U.S
Bolin, A. (2009). Bike Lust: Harleys, Women, and American Society.: Bike Lust: Harleys, Women, and American Society. American Anthropologist, 104(4), 1242-1244. doi:10.1525/aa.2002.104.4.1242.2
Lawrence, P., & Lorsch, J. (2011). Organization and environment. Boston: Division of Research, Graduate School of Business Administration, Harvard University.
Porter, A. (2007). Gendered states. Toronto: University of Toronto Press.
Porter, A. (2011). Accelerated testing and validation. Amsterdam: Newnes.
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